Save Article

Nymex Clears Last Hurdle With IRS
To Proceed With Restructuring Plan

Dow Jones Newswires

Updated Oct. 24, 2000 8:25 p.m. ET

NEW YORK -- The Internal Revenue Service Monday ruled that there will be no tax consequences for the New York Mercantile Exchange or any member resulting from a Nymex plan to switch to for-profit status, according to an exchange statement Tuesday.

Nymex Traders Pass Plan to Incorporate Exchange (June 22)

Exchange Vote Is Expected to Back For-Profit Proposal (June 7)

Nymex Unveils a Blueprint to Become Corporate Entity (Jan. 7)

The IRS ruling was the final approval required for the Nymex restructuring, or demutualization, plan. Nymex will be the first exchange in New York to move from a not-for profit membership structure to a for-profit organization. The effective date of the transaction will be announced shortly.

"Yesterday's approval is the final step in repositioning the exchange as a 21st century business enterprise that will create and pursue profitable new opportunities, react rapidly and decisively in an increasingly competitive marketplace, and explore interest by outside investors," Nymex Chairman Daniel Rappaport said.

Since last December, the restructuring plan has been approved by the Securities and Exchange Commission, the Commodity Futures and Trading Commission and a 97.5% majority of exchange members.

A new stock-holding company named Nymex Holdings, Inc., will be formed to own all of the economic interest and most of the voting control in the for-profit membership corporation. Each existing Nymex Division membership will be converted into one share of common stock in Nymex Holdings representing equity in the overall organization, and one membership in the exchange representing trading privileges.

The common stock and trading privileges will not be separable until a majority of the stockholders vote to permit separate trading of the common stock and trading rights.

Nymex Clears Last Hurdle With IRS
To Proceed With Restructuring Plan

NEW YORK -- The Internal Revenue Service Monday ruled that there will be no tax consequences for the New York Mercantile Exchange or any member resulting from a Nymex plan to switch to for-profit status, according to an exchange statement Tuesday.